Air Force awards $49.6M contract for pyrotechnics, highlighting sole-source procurement for specialized munitions

Contract Overview

Contract Amount: $49,582,975 ($49.6M)

Contractor: ATK Launch Systems LLC

Awarding Agency: Department of Defense

Start Date: 2004-03-03

End Date: 2017-04-30

Contract Duration: 4,806 days

Daily Burn Rate: $10.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200412!000323!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0026 !A!N! !N! ! !20040303!20060731!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!15830!003!49!CORINNE !BOX ELDER !UTAH !+000023742987!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !325998!E! !1! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: CORINNE, BOX ELDER County, UTAH, 84307, UNITED STATES OF AMERICA

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $49.6 million to ATK LAUNCH SYSTEMS LLC for work described as: 200412!000323!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0026 !A!N! !N! ! !20040303!20060731!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!15830!003!49!CORINNE !BOX … Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market exploration. 2. Significant duration of over 4800 days suggests a long-term need for these specialized pyrotechnic products. 3. The contract's value, while substantial, needs benchmarking against similar sole-source procurements for pyrotechnics. 4. Focus on pyrotechnics indicates a niche but critical component within the Air Force's ammunition supply chain. 5. The contractor's location in Utah may point to regional industrial capabilities in defense manufacturing.

Value Assessment

Rating: questionable

The contract value of $49.6 million for pyrotechnics over an extended period requires careful scrutiny. Without competitive bidding, it is difficult to ascertain if this represents a fair market price. Benchmarking against similar sole-source contracts for specialized munitions is crucial to assess value for money. The lack of competition inherently limits the government's ability to secure the best possible pricing and terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The absence of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. This can result in a less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives essential pyrotechnic materials for its operations. Services delivered include the supply of specialized pyrotechnic products, likely for use in munitions and training. The geographic impact is centered around the contractor's facility in Corinne, Utah, supporting local employment and industry. Workforce implications include the maintenance of specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Extended contract duration of over 10 years may indicate a lack of market alternatives or long-term strategic sourcing.
Lack of detailed performance metrics in the provided data makes it difficult to assess effectiveness.
The specific nature of 'pyrotechnics' could involve inherent safety and handling risks that require stringent oversight.

Positive Signals

Contract supports a critical niche capability within the Department of Defense's ammunition supply.
The award to ATK THIOKOL INC suggests a reliance on established contractors with specific expertise.
The contract is firm-fixed-price, which shifts some cost risk to the contractor.

Sector Analysis

This contract falls within the 'Other Miscellaneous Chemical Product and Preparation Manufacturing' sector, specifically focusing on pyrotechnics. This is a specialized segment of the broader chemical manufacturing industry, often closely tied to defense applications. The market for such specialized defense components is typically limited, with a few key players possessing the required expertise and certifications. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar explosive or pyrotechnic materials within the defense sector.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to ATK THIOKOL INC, a large entity. There is no explicit information regarding subcontracting plans for small businesses. Without a competitive process or specific set-aside requirements, the direct impact on the small business ecosystem is likely minimal, though the prime contractor's supply chain could involve smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature, there may be increased emphasis on performance monitoring and ensuring compliance with contract terms. Transparency is limited due to the lack of competitive bidding, making public assessment of oversight effectiveness challenging. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Ammunition Procurement
Specialized Chemical Manufacturing
Air Force Munitions Contracts
Sole-Source Defense Procurements
Pyrotechnic Material Supply

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.6 million to ATK LAUNCH SYSTEMS LLC. 200412!000323!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0026 !A!N! !N! ! !20040303!20060731!002241164!002241164!001339472!N!ATK THIOKOL INC !9160 NORTH HIGHWAY 83 !CORINNE !UT!84307!15830!003!49!CORINNE !BOX ELDER !UTAH !+000023742987!N!N!000000000000!1370!PYROTECHNICS !A6 !AMMUNITION !000 !* !325998!E! !1! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is ATK LAUNCH SYSTEMS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $49.6 million.

What is the period of performance?

Start: 2004-03-03. End: 2017-04-30.

What is the historical spending pattern for pyrotechnics by the Department of Defense, and how does this contract compare?

Analyzing historical spending on pyrotechnics by the DoD requires access to detailed procurement databases. However, it's generally understood that spending in this niche area fluctuates based on operational tempo, modernization programs, and inventory needs. This $49.6 million contract, awarded in 2004 and potentially extending over a decade, represents a significant, long-term investment. Without comparative data on similar sole-source or competitive contracts for pyrotechnics, it's difficult to definitively state if this amount is high or low relative to historical trends. However, the sole-source nature suggests it might be at the higher end due to the lack of competitive pressure.

What specific types of pyrotechnics are being procured under this contract, and what are their intended uses?

The provided data classifies the National Stock Number (NSN) '325998' under 'PYROTECHNICS' and 'AMMUNITION'. This suggests the pyrotechnics are likely components for military munitions, such as flares, tracers, smoke signals, or explosive charges used in various ordnance. Their intended uses could range from signaling and illumination on the battlefield to target marking, training exercises, or as integral parts of explosive devices. The specific application would dictate the precise technical specifications and safety requirements for these materials.

What are the risks associated with a sole-source contract for specialized defense materials like pyrotechnics?

Sole-source contracts for specialized defense materials like pyrotechnics carry several risks. Primarily, the lack of competition can lead to inflated prices, as the government cannot leverage market forces to secure the best value. There's also a risk of complacency from the sole provider, potentially impacting innovation or responsiveness. Furthermore, reliance on a single supplier creates a vulnerability in the supply chain; any disruption at the contractor's facility could have significant operational consequences for the military. Ensuring adequate oversight and performance monitoring becomes even more critical in sole-source situations.

What is the track record of ATK THIOKOL INC in supplying pyrotechnics or similar defense materials to the government?

ATK THIOKOL INC (now part of Northrop Grumman) has a long history of supplying various defense products, including solid rocket motors, propellants, and energetic materials, which often overlap with pyrotechnic technologies. Their involvement in major defense programs suggests a significant track record and established capabilities. While specific details on their performance for NSN 325998 are not provided, their general standing within the defense industry implies a capacity to meet stringent military requirements. However, a thorough review would necessitate examining past performance evaluations and any documented issues related to quality, delivery, or cost.

How does the contract duration of over 4800 days (approximately 13 years) impact the value proposition for the government?

A contract duration exceeding 13 years, as indicated by the 4806 days, presents a mixed value proposition. On one hand, it offers stability and predictability for the government's supply chain, ensuring a consistent source of critical pyrotechnic materials. It can also foster a strong, long-term relationship with the supplier, potentially leading to better understanding and collaboration. However, such extended durations, especially under a sole-source award, can lock the government into potentially outdated technology or pricing structures. It also reduces flexibility to adapt to changing requirements or market conditions, and the lack of periodic re-competition means potential cost savings over time are forgone.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 9160 NORTH HIGHWAY 83, CORINNE, UT, 84307

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline